States are taking steps to make sure they are collecting the correct amount of sales tax from shops as online shopping continues to gain popularity. The Voluntary Out of State Retailer Program is one way West Virginia is achieving this. But what does this actually mean, and how does it impact state taxes?
A company that does not have a physical location in West Virginia but elects to voluntarily collect and send sales tax on transactions made by West Virginia residents is known as a voluntary out-of-state retailer. In response to the 2018 Supreme Court ruling in South Dakota v. Wayfair, Inc., which permitted states to demand that out-of-state retailers collect and remit sales tax on transactions made by their citizens, this initiative was created.
What is exempt from taxes in West Virginia? Despite West Virginia having a sales tax, some things are exempt from it. These consist of supplies, pharmaceuticals, and medical equipment. Additionally, certain services such as health care and legal services are not subject to sales tax.
Is Social Security subject to taxation in West Virginia in this regard? Social Security payouts are not subject to tax in West Virginia. Other forms of retirement income, however, can be subject to state taxation.
Is there a property tax in West Virginia? Yes, there is a property tax in West Virginia. A property owner’s tax bill is determined by the assessed value of their home and the county tax rate. Local services like education, law enforcement, and infrastructure are paid for through property taxes.
What goods are therefore free from Virginia’s sales tax? In Virginia, certain products like food, prescription medications, and medical equipment are free from sales tax. Also exempt from sales tax are transactions made during the annual sales tax holiday, which normally takes place in August. Clothing, shoes, school supplies, and energy-efficient appliances all fall under this category.
In conclusion, West Virginia can make sure it is getting the right amount of sales tax revenue from out-of-state shops by implementing the Voluntary Out of State Retailer Program. Although there is a sales tax in the state, some things are exempt from it, such as groceries and medical equipment. In West Virginia, Social Security payouts are also exempt from taxation. Property taxes are collected by the state and used to pay for regional services. In Virginia, there is a yearly sales tax holiday and some things like food and prescription medications are free from paying sales tax.
You must multiply the entire cost of the purchase by the applicable sales tax rate to determine the amount of sales tax. The amount of sales tax varies by state, even by the city or county. The state sales tax in West Virginia is 6%, and there may also be local taxes on top of that. The price of the purchase is subsequently increased by the sales tax.
The highest sales tax state is not mentioned in the article “Voluntary Out of State Retailer: What it Means and How it Affects Taxes in West Virginia”. However, starting of 2021, California will have the highest state sales tax rate of 7.25%.